Business Leaders Welcome Positive Signs Of Economic Rebound

Several business leaders are welcoming the positive signs that the economy is rebounding from the economic fallout caused by the coronavirus (COVID-19), and the projections of a return to pre-pandemic levels of growth and employment over the short to medium term.

They are also crediting the Government’s fiscal management in steering the country towards a path of recovery.

Following a period of contraction in economic activity due to the global spread of COVID-19, the Statistical Institute of Jamaica (STATIN) reports that Jamaica recorded growth of 14.2 per cent for the April to July 2021 quarter. There was also a 4.1 percentage point reduction in the unemployment rate to 8.5 per cent, and a commensurate 8.3 per cent increase in employment.

The latter out-turn saw 93,400 additional persons securing jobs as at July 2021 to boost the employed labour force complement to just over 1.2 million.

Of note, the unemployment rate as at July 2021 is just a 0.7 percentage point shy of the record 7.8 per cent attained in July 2019.

The Planning Institute of Jamaica (PIOJ) reported growth of 6.3 per cent for the July to September 2021 quarter and expects the positive outlook to continue, with growth in the range of five to eight per cent for October to December 2021. Director General, Dr. Wayne Henry says the out-turn is expected to spur calendar-year expansion of between three and six per cent.

The Institute also projects that growth in fiscal year 2021/22 will fall in the range of six to nine per cent and anticipates full pre-pandemic economic recovery in 2023/24 and for employment to rebound to the level attained two years ago, in 2022/23.

In addition, the Bank of Jamaica (BOJ) says the projection is for 2021/22 fiscal year growth to be in the range of seven to 10 per cent, before moderating to between two and four per cent, while indicating that the labour market is “on a path of improvement”.

While new variants of the virus could pose challenges to the forecast, Seprod Group’s Chief Executive Officer (CEO), Richard Pandohie, tells JIS News that the out-turns, coupled with encouraging signs of revival by the tourism industry, evidenced by the increase in visitor arrivals and industry earnings, “reflect the fact that the recovery process has started”.

Stopover visitor arrivals, up to November 16, totalled 1.2 million, while Jamaica has welcomed 36,000 passengers since cruise shipping resumed in August. The industry has, so far, generated some US$1.5 billion in earnings.

“These are good signs; you’re getting the sense that things are beginning to happen again. We have gone through 18 months of just really tough situations. So, any move in a direction of growth [is welcomed], and we should keep pushing harder at it to make sure that we just keep the momentum going.

“I think we were really in a decent [economic] position [prior to COVID-19], and we’d like to get back there,” he adds.

The CEO cites other notable indicators, including business process outsourcing (BPO) output surging above pre-pandemic levels, remittances being “far stronger that we expected,” and the Jamaican dollar holding relatively firm against its US counterpart.

Mr. Pandohie, who is Immediate Past President of the Jamaica Manufacturers and Exporters Association (JMEA), contends that the level of macroeconomic stability attained, and the fiscal responsibility framework established have fueled the country’s resilience during the pandemic.

“No doubt about that. I think the fiscal responsibility of Government… gave us some fiscal cushion where Jamaica was, largely, in a position to absorb some of the shocks and institute social programmes to help the most vulnerable. As a small nation, I think we should be very proud of… what we are seeing [which] is a maturing of the running of the country from a fiscal position,” he tells JIS News.

Mr. Pandohie adds: “When you look at the context of many other countries, I think Jamaica has stood up well, so far, during this pandemic; it speaks well to the management of the economy, and I’m pleased.”

He points out that while Jamaica took nearly 10 years to recover from the previous major global catastrophe impacting the nation, the 2008/09 financial crisis, based on current developments, “it is clear to me that, hopefully, our recovery this time is going to be much faster”.

“I’m cautiously optimistic. I think we are still going against the headwind. But… from a governance standpoint, I think there’s good management [in place] … there’s no question about that in my mind,” Mr. Pandohie says.

JMEA President, John Mahfood, for his part, says that the out-turns and projections are “generally positive” and “indicate the fact that there is relative stability in the Government’s fiscal policy and its management of the COVID-19 spread”.

He maintains that the growth and employment projections are realistic, adding:  “If the Government can maintain control over the spread of the virus, I believe those are attainable.”

Business analyst, Warren McDonald, also welcomes the “very good figures” as indicative of “some form of recovery” from the effects of COVID-19.

He says key areas that have been recording encouraging upticks in output and performance are tourism and manufacturing, noting that government revenue inflows are improving while remittances are strong.

Mr. McDonald points out that the Government’s COVID-19 vaccination programme, which has seen more than one million persons being immunised, has served to lower the level of concerns.

“I think there is optimism, now, that there is a way of working with COVID-19 and people being able to resume some sort of normality and getting productivity back up,” he tells JIS News.

Noting that the macroeconomic stability attained through the Government’s fiscal prudence has figured significantly in enabling Jamaica to weather the pandemic, so far, Mr. McDonald says he is optimistic about the prospects of the economic recovery taking place within the timelines projected, citing the vaccination programme as critical in this regard.

“We have some ways to go in terms of regaining pre-pandemic growth and employment levels; but these are attainable. If persons see further upticks in the vaccination rates and resumption in activities, then that will serve to generate confidence, going forward, and that the recovery will be faster than anticipated,” he adds.

Small Business Association of Jamaica (SBAJ) President, Michael Leckie, who indicates that he is cautiously optimistic, says heightening vaccinations to attain at least the Government’s minimum 65 per cent immunisation target by March 2021, and facilitating more support, especially to micro, small and medium enterprises, will be key to spurring the rate of recovery being pursued.